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Badal Sanyal

KOLKATA, March 22

THERE is strong apprehension about 300 small paper mills in the country may eventually be forced to down shutters as they are not in a position to compete in terms of cost and quality vis-à-vis the international market.

The All-India Small Paper Mills' Association (AISPMA) is almost convinced that paper mills whose operations are based on waste paper are unlikely to survive because of their un-competitiveness. Only the mills which are producing high-end speciality products and those which are implementing modernisation and revival plans may be able to operate profitably even under the WTO regime when restrictions on imports will have been reduced and import duties brought down.

AISPMA has observed that about 300 small paper mills making total production of about two million tonnes of writing and printing paper per annum are not in good health. In fact, some of the mills have already been registered with the Board for Industrial and Financial Reconstruction (BIFR), while many of such mills do not have resources to invest into the mills for upgradation and modernisation.

Highlighting the reasons for the current state of affairs of small paper mills, AISPMA has stated that the Government in the late 60s had encouraged paper production by setting up small paper mills based on unconventional raw material such as waste paper, agro raw materials such as rice and wheat straw, etc.

Paper mills in this segment were set up mostly on the basis of second-hand imported machines. Though these mills could not produce better quality paper on par with mills that were set up based on forest raw material, these mills could run having good operating profits due to the shortage of paper in the country.

The entire scenario has since changed with the Government withdrawing controls on imports of paper and paper products and reducing customs duties.

Against this background, AISPMA has urged the Union Government to formulate a policy so that many small paper mills, which are still producing papers of international quality and standards from waste paper, would get opportunities to modernise.

The association is of the view that small paper mills should be encouraged to produce high-grade paper by recycling waste paper.

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